Fair Trade Bananas: Comparison of Standards and Market Growth Luisa Arroyave

Outline Introduction Why Fair Trade started? Fair trade Banana Standards Comparison between Fairtrade, Banafair and Rainforest Fairtrade Prices Fair trade bananas in International Market

Introduction “ Is a trading partnership, based on dialogue, transparency and respect that seeks greater equity in international trade” “ it contributes to sustainable development by offering better trading conditions to, and securing their rights of, disadvantage producer of developing countries” (FINE, 2001)

Introduction Main objectives: –Alternative trade –Help disadvantages producers Different categories: Bananas most important –US banana consumption 11.2 kg per capita in 2006 (USDA,2007) –EU(25) 10.1 Kg per capita average ex Norway(14.5kg) and Germany(11kg) (CIRAD, 2005) –Staple food Fair trade bananas are gaining ground in the market –Follow standards

Why Fair Trade started? Background –First initiatives USA and EU 60 years ago –Multinational’s social and labor accusations –Conventional banana trade multinational domination –Formalization with FLO in ? –Decrease of banana prices Formal OrganizationFormal

Comparison of Standards BANAFAIR FLO RAINFOREST ALLIANCE

Fair Trade Banana Standards Direct relationships, less middlemen Guarantee a minimum price Give a Premium price Enable credits or advance payments Long-term relationships Fair treatment and trade for producers

Fair Trade Banana Standards Social and Ecological Minimum Standards Company independent Production Give a minimum price (cover production costs) Long-term cooperation Additional price for financing projects Educational projects

Fair Trade Banana Standards Social and Environment Management System Ecosystem conservation Wildlife conservation Water and Soil conservation Fair treatment and good working conditions Integrated pest management Integrated waste management

Comparison of Standards

Fair Trade Prices Minimum price –Covers production costs –According to country of origin –Use external information –Varies depending of banana type –It can increase if market prices arise above it.

Fair Trade Prices Factors that may rise prices –Higher production costs –Absence of economies of scale –Retailers RA do not give a minimum price –Conventional banana market prices.

Fair Trade Prices Source: FLO and Banafair Ecuadorian examples

Market Main producers –LA –Caribbean –Asia –Africa Main importers –United States –Europe –Japan Banana Market –Conventional 11MillionT –Organic MT –Fair trade MT »(Cruz, G 2006) Fair trade does not count RA bananas RA has a higher market share –Sales 15% of all int. banana trade –In million of 12.8 millions

Market Growth Source: FLO,2008

EU Market Share Source: Fairtrade EU Facts and Figures, 2005

Conclusions Fair trade is not only a good way to help producers also is becoming a way to market products as well. Integration of the different fair trade standards and concepts to establish an international recognized “Fair Trade product” RA is not a fair trade organization and should not be compare as one. Banafair and FLO both are fair trade organizations. They are in the same direction but with small differences. Fair trade market is growing and its expected to continue, but it should be careful of “apparent fair trade firms”

Thank you

Fair trade Organization International Organizations European Associations and World Shops In United States

FLO Labelling Initiatives Fair trade Australia Max Havelaar Belgium Transfair Canada Max Havelaar Denmark Reilun kaupan edistämisyhdistrys ry. Finland Max Havelaar France Transfair Germany Fairtrade Mark Ireland Fairtrade Transfair Italy Fairtrade Labelling Australia and New Zealand Transfair Minka Luxembourg Stichtching Max Havelaar Netherlands Fairtrade Max Havelaar Norway Asociación para el Sello del Comercio Justo Spain Rättvisemärkt Sweden Max Havelaar Stiftung Switzerland Fairtrade Foundation UK Transfair USA Fairtrade Label Japan Source (FLO, 2008)

References Banafair (2008): Wer ist Banafair? : accessed on May 15th, 2008www.banafair.de/ Banafair (2008): Alltagshandeln ist Politisches Handeln! : accessed on May 15th, Banafair (2008): Preiskalkulation “Fair trade Bananen” von Urocal, Ecuador: accessed on May 15th, Bananalink (2008): The Banana Trade. : accessed on April 22th, Chiquita Brands, Labor and Environment Commitment: accessed on May 10th, EFTA (2006): Sixty Years of Fair Trade, A brief history of the Fair Trade movement. November accessed on April 22th, 2008www.european-fair-trade-association.org Fairtrade Foundation (2000): Unpeeling the Banana Trade. accessed on May 5th, Fairtrade.Toronto (2008): What is Fair Trade? : accessed on April 25th, FAO (1999): The Market for “Organic and Fair Trade” Bananas. Intergovernmental Group on Bananas and on Tropical Fruits. accessed on May 10th, FINE (2001): Fair Trade Definition and Principles. As agreed by FINE. December accessed on April 30th,

References FLO (2005): Fairtrade in Europe Facts and Figures on Fairtrade 25 European Countries. accessed on May 17th, FLO (2007): Fair Trade Labelling Organization International Annual Report. accessed on April 30th, FLO (2008): Fair Trade Standard for Bananas for Small Farmer’s Organizations accessed on April 20th, FLO (2008): Fairtrade Bananas-Looking Behind the Price Tag. accessed on May 2th, IFAT (2007): Fair trade Standards and their Verification in Brief. April accessed on May 13th, ILO (2008): Labour Standards. accessed on May 17th, Rainforest Alliance (2008): Sustainable Agriculture Standard. Sustainable Agriculture Network. February accessed on May 12th, Transfair.USA (2006): Annual Report. accessed on May 20th, 2008www.transfairusa.org/content/resources/faq.php UNCTAD (2008): Banana Market. Market Information in the Commodities Area. accessed on May 20th, La Cruz, G., “The Contribution of Fair Trade towards Market Access by Smallholder Banana Producers”. Agro-food chains and networks for development. Springer, pgs 69-79